---
title: "Green energy revenues could fund universal health coverage, say researchers"
id: "bmj-3-green-transition-provides-a-crucial-opportunity-to-finance-universal-health"
canonical_url: "https://medichelpline.com/clinical-feed/bmj-3-green-transition-provides-a-crucial-opportunity-to-finance-universal-health"
content_type: "clinical_feed_article"
specialty: "General"
source_name: "BMJ"
source_url: "http://www.bmj.com/content/395/bmj-2026-100890.short?rss=1"
published_at: "2026-10-21T22:30:49.000Z"
evidence_level: "Journal Feed"
license: "CC-BY-NC-4.0 / Informational Use"
---
# Green energy revenues could fund universal health coverage, say researchers
## Provenance & Clinical Metadata
- **Canonical URL:** https://medichelpline.com/clinical-feed/bmj-3-green-transition-provides-a-crucial-opportunity-to-finance-universal-health
- **Specialty:** [General](https://medichelpline.com/clinical-feed/general.md)
- **Primary Source:** BMJ
- **Source URL:** [Original Journal Publication](http://www.bmj.com/content/395/bmj-2026-100890.short?rss=1)
- **Published At:** 2026-10-21T22:30:49.000Z
- **Evidence Rating:** Journal Feed
## Executive GIST (TL;DR)
- The study authors argue that the **green energy transition** creates new public revenue streams that could be mobilised to finance **universal health coverage** (UHC) in low and middle income countries. - They define fossil fuel subsidies as government measures that keep consumer prices below supply costs, including direct payments, state-owned utility losses, and price controls. - Global fossil fuel subsidy spending is volatile and sensitive to oil price shocks; a 2022 price spike raised global subsidy spending to $1.4tn, the authors noted. - A recent peak in subsidy spending is expected in 2026 linked to policy responses to the Iran conflict, per the source. - Analysis cited from 126 countries estimated each extra dollar of subsidies displaced $0.35 of domestic health spending between 2015-19. - Reform windows occur when global prices fall, allowing subsidy removal with smaller consumer impact; however, most reforms proved short lived in 2016–23, with only 30% surviving 12 months and 9% lasting three years. - Country examples: Indonesia’s 2014–15 reform cut fuel subsidies and supported expansion of the national insurance scheme (JKN), though the price-linking mechanism was suspended in 2017 and subsidies rose again in 2022; Brazil’s 2013 law earmarked 25% of new oil royalties to municipal healthcare but evaluations found no overall effect on health spending or service delivery. - The authors highlight recurring barriers: fiscal substitution (governments offsetting new funds by reducing existing health allocations) and weak absorptive capacity in health systems. - Demand for **critical minerals** (eg, lithium, cobalt) is projected to grow substantially by 2040; the source reported a 30% rise for copper and almost 400% for lithium. - Many low and middle income countries lack fiscal frameworks to capture mineral revenues, posing a risk of replicating resource-curse dynamics. - The annual UHC financing gap for low and middle income countries during 2026–30 is estimated at $20–54bn per year, per the article. - Distribution of potential green-transition revenues is misaligned with need: upper middle and high income countries account for around 75% of subsidy and mineral revenue potential while low income countries have the largest UHC gaps but far smaller revenue prospects. - The authors call for governance arrangements and international redistribution mechanisms to ensure revenues materialise and reach health budgets. - The source did not report detailed fiscal modelling, implementation costs, or precise mechanisms for international transfers beyond general policy recommendations.
## Clinical Analysis & Structured Key Points
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[News & Views](https://www.bmj.com/us/news) 2. Green transition... 3. Green transition provides a crucial opportunity to finance universal health coverage Analysis # Green transition provides a crucial opportunity to finance universal health coverage BMJ 2026; 395 doi: (Published 21 October 2026) Cite this as: BMJ 2026;395:e100890 * [Article](https://www.bmj.com/content/395/bmj-2026-100890 "Article Tab - Article")[](https://www.bmj.com/panels_ajax_tab/jnl_bmj_tab_art/node:1129199/1 "Article Tab - Article") * [Related content](https://www.bmj.com/content/395/bmj-2026-100890/related "Article Tab - Related Articles")[](https://www.bmj.com/panels_ajax_tab/jnl_bmj_tab_related_art/node:1129199/1 "Article Tab - Related Articles") * [Metrics](https://www.bmj.com/content/395/bmj-2026-100890/article-info "Article Tab - Info & Metrics")[](https://www.bmj.com/panels_ajax_tab/jnl_bmj_tab_info/node:1129199/1 "Article Tab - Info & Metrics") * [Responses](https://www.bmj.com/content/395/bmj-2026-100890/rapid-responses "BMJ Article Related Rapid Responses")[](https://www.bmj.com/panels_ajax_tab/bmj_related_rapid_responses/node:1129199/1 "BMJ Article Related Rapid Responses") * [Peer review](https://www.bmj.com/content/395/bmj-2026-100890/peer-review "Article Tab - Peer review")[](https://www.bmj.com/panels_ajax_tab/jnl_bmj_tab_peer_review/node:1129199/1 "Article Tab - Peer review") * [](https://www.bmj.com/content/395/bmj-2026-100890/submit-a-rapid-response "BMJ Rapid Responses Form")[](https://www.bmj.com/panels_ajax_tab/bmj_rapid_responses_form/node:1129199/1 "BMJ Rapid Responses Form") ![Loading](https://www.bmj.com/sites/all/modules/contrib/panels_ajax_tab/images/loading.gif) 1. Judite Gonçalves, assistant professor[1](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#aff-1), 2. Fernando Postali, professor of economics[2](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#aff-2), 3. Moh Shadiqur Rahman, assistant professor[3](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#aff-3), 4. Christopher Millett, professor of public health[4](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#aff-4)[5](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#aff-5)[6](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#aff-6) [Author affiliations](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1) 1. 1Public Health Policy Evaluation Unit, Imperial College London, London, UK 2. 2Department of Economics, University of São Paulo, São Paulo, Brazil 3. 3Department of Agriculture Socioeconomic, Faculty of Agricultural Bio-industry and Forestry, Universitas Brawijaya, Malang, Indonesia 4. 4Public Health Policy Evaluation Unit, Imperial College London, London, UK 5. 5NOVA National School of Public Health, Public Health Research Centre, Comprehensive Health Research Centre, NOVA University Lisbon, Lisbon, Portugal 6. 6Centre for Research on Population and Health, Faculty of Health Sciences, American University of Beirut, Beirut, Lebanon 1. Correspondence to: J Gonçalves j.goncalves@imperial.ac.uk **Judite Gonçalves and colleagues** argue that health financing must be at the centre of how fossil fuel subsidies and critical mineral revenues are governed The green energy transition is opening up potential sources of new finance that could be used to fund universal health coverage (UHC) in low and middle income countries. Fossil fuel subsidies—government support that keeps energy prices below supply costs, whether through direct payments, state owned utility losses, or price controls—can account for a large proportion of government spending.[1](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-1) Reducing these subsidies as part of a shift away from fossil fuels, alongside introducing carbon pricing and capturing new royalties from critical minerals, would provide extra resources for public services. Health systems, which bear current and future health consequences of fossil fuel use and mining activities, have a strong argument for benefiting from these resources, but how much reaches those in greatest need will depend on political decisions and good governance. ## Fossil fuel subsidies crowd out health spending Fossil fuel subsidies remain large, widespread, and acutely sensitive to international oil prices. When Russia invaded Ukraine in 2022, the resulting price shock pushed subsidy expenditure to $1.4tn globally, a 50% increase in a single year.[2](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-2) A new global subsidy expenditure peak is expected in 2026 as governments respond to the oil price surge caused by the ongoing Iran conflict with measures such as tax cuts and price caps to protect consumers.[3](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-3) With constrained government budgets, higher subsidy expenditure threatens health spending: a recent study of 126 countries estimated that each additional dollar spent on fossil fuel subsidies displaced $0.35 of domestic health spending during 2015-19.[4](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-4) Yet oil price shocks also open windows for reform because when global prices subsequently fall, governments can remove subsidies with low consumer impact, reducing the political cost of reform ([box 1](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#boxed-text-1)). However, windows for policy change close quickly, and reforms have often proved short lived: a study of reform attempts made in 2016-23 by the 21 countries with the largest petrol subsidies in 2003-15, found that only 30% survived 12 months and just 9% lasted three years.[5](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-5) Reform typically fails when governments raise prices once without linking them to international prices. This means gains are eroded as prices rise again, inflation accelerates, or currencies weaken—a fragility compounded by successive crises like the covid-19 pandemic and the Ukraine and Iran conflicts. Box 1 ### Lessons from Indonesia and Brazil #### Indonesia’s 2014-15 fossil fuel subsidy reform In November 2014, President Joko Widodo reduced fuel subsidies, increasing petrol and diesel prices by around 31% and 36%, respectively. By January 2015, petrol subsidies were eliminated entirely and diesel shifted to a fixed subsidy. Falling global oil prices at the time softened consumer impact and reduced political opposition. Fuel subsidies fell from 19% of government expenditure in 2014 to under 7% in 2015,[1](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-1)helping sustain expansion of the national health insurance scheme (Jaminan Kesehatan Nasional, JKN), launched in January 2014. Population coverage has grown from 50% in 2014 to 98% in 2024.[21](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-21)[22](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-22) Savings were also redirected towards healthcare infrastructure, as well as a national conditional cash transfer programme (Program Keluarga Harapan, PKH), which has been credited with reduced child stunting.[23](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-23)[24](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-24) However, reform proved fragile. The mechanism linking fuel prices to global oil prices, introduced in 2015, was suspended in 2017,[25](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-25) and subsidies rose sharply when prices surged again in 2022, showing the importance of automatic price adjustment mechanisms.[5](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-5) Subsidies were also mistargeted, with 74% of the benefit accruing among the richest 60% of the population.[26](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-26) Meanwhile the JKN continues to face structural financing gaps[21](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-21) that limit the ability to provide universal health coverage for the most vulnerable populations. **Brazil’s earmarking of oil royalties for municipal health** Brazil’s 2013 Law 12 858 earmarked 25% of oil royalties from new extraction contracts for municipal healthcare (with the remaining 75% for education), seeking to address chronic underfunding of local health systems and compensating local communities for the environmental and health externalities of mining. Yet, evaluation found no overall effect of new earmarked revenues on health spending or service delivery.[27](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-27) Only municipalities receiving above average per capita royalties had significant increases in health spending, and these were slow to occur and concentrated in hospital care because primary care investment is constrained by rules prohibiting use of royalties for payroll expenditure. Two barriers recur: fiscal substitution, where governments offset new earmarked funds by reducing existing health allocations; and weak absorptive capacity, where health systems lack the workforce, infrastructure, and governance capacity to convert additional funding into services. Royalties are also concentrated in the oil producing states. In 2025, three states (Rio de Janeiro, Espírito Santo, and São Paulo) received 93% of state royalty payments.[28](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-28) A parallel framework for mineral royalties distributes more broadly, including to municipalities with supporting infrastructure for mineral processing or distribution such as railways and ports, but payments remain highly concentrated in producing municipalities, which do not always correspond to areas with greatest health needs. [RETURN TO TEXT](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#xref-boxed-text-1-1) ## Critical minerals: new revenue potential, old governance risks Critical minerals such as lithium, cobalt, and rare earth elements are essential to the low carbon energy transition, creating a new revenue stream for mineral rich countries. Large quantities are required for electric vehicle batteries, solar panels, and electricity storage, with demand projected to grow by 30% for copper and almost 400% for lithium by 2040.[6](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-6) Wealthy and fast growing economies are racing to secure long term supply deals—as shown by the US making its 2025 package of assistance to Ukraine conditional on access to the country’s critical mineral reserves. However, although low and middle income countries are beginning to draw up critical mineral strategies (eg, Africa’s green minerals strategy), most do not yet have the fiscal frameworks needed to capture a fair share of the resulting revenues. There is a risk that the “resource curse” dynamics of the oil and gas era recur, with revenues captured by a small elite and fiscal windfalls that fail to translate into public services and, ultimately, development gains.[7](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-7) The need to compensate for local environmental and health damages of extractive activities adds an extra layer of governance complexity. ## Potential to fill universal health coverage financing gap The annual financing gap for UHC is estimated at $20-54bn a year across low and middle income countries during 2026-30.[8](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-8) However, progress has stalled, exacerbated by sharp cuts to foreign aid for health, principally from the US. Health spending is projected to fall in over 80% of low income countries and 40% of lower middle income countries by 2030.[9](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-9) The countries most exposed to cuts to foreign aid are those furthest from universal coverage. [Table 1](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#T1) sets this gap against potential resources from the green transition by country income group. Two main patterns emerge. First, except in the low income country group, fuel subsidies are enormous relative to the universal coverage gap. Lower middle income countries alone spent $187bn on fossil fuel subsidies in 2024, against a UHC financing gap of just $2bn-$19bn a year. Even accounting for other claims on reform savings—compensation for poor households, renewable energy investment, debt reduction—the scale of subsidy expenditure suggests a modest protected share would close the UHC gap. Table 1 UHC financing gap and potential resources from green transition ($bn/year) by country income group View this table: * [View popup](https://www.bmj.com/highwire/markup/1129202/expansion?width=1000&height=500&iframe=true&postprocessors=highwire_figures%2Chighwire_math) * [View inline](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1) Second, the distribution of revenue potential and need is imperfectly aligned: upper middle and high income countries have no UHC financing gap but account for around 75% of both fossil fuel subsidies and the projected critical mineral revenue potential. Low income countries, with the largest UHC gap, could generate just $5.3bn in fuel subsidy savings and have a projected $1.1bn in critical mineral government revenues annually. This misalignment points to the need for international redistribution mechanisms in line with a just green transition—one that ensures the shift away from fossil fuels does not disproportionately harm poorer countries and communities.[10](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-10)Moreover, whether these revenues materialise at scale and reach health budgets depends on political decisions, governance arrangements, and implementation capacity. Beyond fossil fuel subsidies, the unpriced costs of air pollution and climate change attributable to fossil fuel overconsumption were estimated at around $6.7tn globally in 2024.[2](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-2) These implicit costs can be met through carbon pricing (eg, taxes on carbon emissions or cap-and-trade schemes that require polluters to buy permits), which is a stated policy goal for many governments and a key Paris Agreement commitment.[10](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#ref-10) Estimates of revenue potential from critical minerals in [table 1](https://www.bmj.com/content/395/bmj-2026-100890.short?rss=1#T1) are also understated. The projections cove
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